Inside America, the growing pressure of a trade war with China has seen President Trump threaten to place tariffs on Chinese manufacturers, including those who make iPhones. Speaking about phones and laptops, Trump said: “I can make it 10%, and people could stand that very easily.” On cheap models, maybe, but fast-rising iPhone prices are already on the brink of alienating buyers. A 512GB iPhone XS Max, for example, costs $1450 before sales tax (details).

And the news outside America only compounds this.

Digitimes reports today that Apple has “enforced a second wave of order reduction in the wake of weaker-than-expected sales for its new iPhones”. Apple’s Chinese manufacturers were already reporting profit warnings due to order cutbacks of 25% by their “largest customer”.

Apple’s response: it will give customers up to $100 more when they trade-in their existing iPhones under its ‘GiveBack’ program and upgrade to one of the new models.

Apple is trying to incentivise customers to buy new iPhones

Apple

This is a dramatic change of position. During the Black Friday and Cyber Monday holidays, all Apple offered customers were coupons of up to $50 if they bought older generation hardware at full price. Apple shares are now down 20% this month.

All of which places great pressure on Apple to respond. The 10th-anniversary iPhone X failed to bring a much-anticipated sales ‘supercycle’, an expectation which then moved to the current generation and looks highly unrealistic as well.